The Four Tests for Medicaid Eligibility

?Test 1: Medical Need

The level of medical need required by the person applying for long term care services through Medicaid varies by Medicaid program. The Florida Department of Elder Affairs screens everyone applying for medicaid.

Test 2: The Income Limit

The applicant’s “countable income” must be below $2,199. Medicaid counts your income at gross, not net. You can only tell your gross income by looking at a pension statement. Bank statements only show your net income after deductions. If your gross income is over $2,199 you will have to reduce your income by creating an “income trust”. The income trust will own a checking account and each month you can bring your income down below the $2,199 limit by depositing the income to the trust owned checking account.

Test 3: The Asset Limits

A single person must have less than $2,000 in countable assets one day each month. The spouse of someone applying for medicaid must have less than $119,200 one day during the initial month of medicaid eligibility. Larger assets that are generally not counted in Florida include the primary residence, rental real properties, and individual retirement accounts (qualified accounts) that are making regular periodic payments to the applicant or spouse.

Note: There are many strategies to convert countable assets to non-countable assets or non-countable income for a community spouse.

Test 4: The LookBack

The applicant must report any gifts they have made within the prior 60 months. Gifts are presumed to be made for the purpose of reducing your assets so you can get closer to or below the medicaid asset limits. Small gifts at holidays and birthdays are not typically penalized although there is no formal exception. Similarly, gifts to children have sometimes not been penalized when the caseworker was persuaded that the gift was made for some good reason other than to meet medicaid asset test limits. Periods of ineligibility are calculated by taking the amount of the gift and dividing it by the current average cost of care in a nursing home. Example: Gift of $100,000 would be divided by $7,995 to result in a period of ineligibility of 12.51 months.